Welcome to the foundation of financial competence! Our Statement of Attainment in Bookkeeping Foundations is your gateway to understanding the fundamental principles of bookkeeping and financial record-keeping. Whether you’re a novice in finance, a small business owner, or an individual eager to build a solid financial foundation, this program is your starting point for success.

In an increasingly complex financial world, the ability to navigate and comprehend financial transactions is a valuable skill. This statement of attainment equips you with the essential knowledge and practical skills needed to establish and maintain accurate and organized financial records.

As you embark on this educational journey, you’ll delve into the core principles of bookkeeping, including recording transactions, creating financial statements, and ensuring compliance with accounting standards. Whether you aim to pursue a career in finance or simply wish to manage your personal or business finances with confidence, this program is tailored to meet your needs and empower you with the tools to thrive in today’s financial landscape.

At its core, bookkeeping is about more than numbers; it’s about financial clarity, informed decision-making, and achieving your financial goals. Join us on this enlightening journey, and let’s lay the strong foundation for your financial success together.

Bookkeeping skills are always in demand – study this course by distance learning.

• This comprehensive course covers everything from keeping a ledger and cash control, to the balance sheet and profit and loss statements.
• This Bookkeeping course provides a foundation that can readily be applied anywhere in the world (NB: information is presented in a UK context though, and it provides examples specific to the UK such as Value-Added Tax or VAT).
• There are almost always jobs advertised for bookkeepers in every city. Bookkeeping may provide a pathway to extend your career into many other aspects of accounting, finance and business administration or starting a small business. The choice is yours.
• Every business needs at least one person to do their accounts. Bookkeeping can provide a long and enjoyable career with options to branch out into other areas.

Who Will Benefit From Studying This Course?

•  Small businesses often employ bookkeepers – this course can be a starting point for setting up a small business of your own providing bookkeeping services to other small businesses.
• Administration staff often help with bookkeeping – this course can improve your employment and promotion prospects, for working in administration.
• Business owners who know the fundamentals of bookkeeping will make much better financial managers. This course can help a business owner achieve greater control over their business, and, in turn, greater profitability.
• Careers in finance (e.g. banking, investment, accounting) are built on the type of foundation knowledge that comes from this course. If you are thinking of a career in finance, it may be wise to start with a course such as this, and gain an understanding of the industry and what is involved, before deciding on the exact direction to take with your career.

Course Structure and Lesson Content

Introduction – Nature & Scope and Function of Bookkeeping

• What is bookkeeping?
• Difference between accountants and bookkeepers.
• History of bookkeeping.
• Bookkeeping terminology.
• Understanding language.
• Why do we need bookkeeping?
• Bookkeeping as a management tool.
• Business structures.
• Financial information.
• Accounting conventions and doctrines.
• Accounting standards.
• Australian accounting standards.
• UK accounting standards.
• International cooperation on standards.

The Balance Sheet

• What is a balance sheet?
• Assets and liabilities.
• Components of a balance sheet.
• What items do not appear on the balance sheet.
• Example of a Balance Sheet.
• Tracking business performance.
• T format balance sheet.
• Balance sheet allocations.
• What is working capital?

Analysing and Designing Accounting Systems

• What is an accounting system?
• Understanding the flow of information in bookkeeping.
• Other business documents – statements, order forms, quotations.
• Steps in the bookkeeping process.
• Designing the System.
• Analysing business needs.
• Designing the accounting system.
• Designing the chart of accounts.
• Writing a chart of accounts.
• Designing the type of journals needed.

The Double Entry Recording Process

• Ledgers.
• Opening the general ledger.
• Ledger accounts/sub ledger.
• The general ledger.
• Entries resulting from transactions.
• Recording transactions.
• Different types of accounts.
• A trial balances.
• Ledger accounts and double entry bookkeeping.
• Recording entries.
• Rules to follow.
• Analysis chart.
• Footing ledger accounts.
• Balancing ledger accounts.
• The trial balances.
• Accounting for drawings.
• Revision of definitions and processes.

The Cash Receipts and Cash Payments Journal

• Recording cash transactions in journals.
• Multi column receipts journal.
• Cash payments journal.
• Multi column cash payment journal.
• What discounts are allowed.
• Accounting discounts allowed and received.

The Credit Fees and Purchases Journal

• Credit sales and credit purchases.
• Credit sales journal.
• Debtors subsidiary journal and control account.
• Using a debtor’s schedule.
• The credit purchases journal.
• Creating a creditors subsidiary ledger and schedule.
• The cash payments journal and creditors control account.

The General Journal

• Recording non-standard transactions.
• Designing the general journal.
• Posting to a general journal.
• General journal entries and ledgers.
• Anomalies.
• Recording credit purchases of non-current assets.
• Recording owners’ contributions or withdrawals.
• Recording debts that are written off.
• Recording contra entries.
• Recording purchase returns.
• Other uses for a journal.

Closing the Ledger

• Closing at the end of the accounting period.
• Preparing for the new accounting period.
• Transferring balance day closing entries.
• Profit and loss account.
• Determining gross profit.
• Simple profit and loss account.
• Balance sheet.
• Businesses making a loss rather than profit.
• Owner withdrawing revenue.
• The end results.

The Profit and Loss Statement

• Introduction.
• The balance sheet and how it relates to Profit and Loss Statement.
• Using net profit figure to evaluate business performance.
• What is profitability?
• Gross Profit.
• Net Profit.
• Cash flow margin.
• Return on assets margin.
• Gearing ratio and how it relates to cash flow.
• Return on owners’ equity margin.
• Informative profit and loss presentation.
• Segmentation.
• Functional classification – grouping expenses.
• Showing extraordinary expenses and revenue.
• Accounting for unused materials or stock.
• Why do we need to calculate the cost of materials used.

Depreciation on Non-current Assets

• Intangible assets.
• Depreciation methods.
• Depreciation calculation methods.
• Calculating depreciation with the straight-line method.
• What if there is no residual value.
• How to enter depreciation into the books.
• Declining balance method of depreciation.
• Calculating percentage rate of depreciation.
• Production units’ method of depreciation.
• What about intangible assets.
• Keeping track of assets and depreciation.
• Asset register.
• End of Useful life for assets.
• Loss disposal of asset account.

Profit Determination and Balance Day Adjustments

• Cash and accrual accounting.
• Cash accounting.
• Accruals accounting.
• Balance day adjustments to final accounts.
• How to record prepaid expenses.
• Showing in the general ledger.
• What about if we owe unpaid expenses on balance day?
• Receiving income in advance.
• Other balance day adjustments – stock, bad debts, depreciation, discounts.
• A more comprehensive treatment of trial balance.
• Partnerships.
• Companies.
• Clubs and non-profit organisations.
• Using a ten-column worksheet or spreadsheet.

Cash Control: Bank Reconciliation and Petty Cash

• Ways of handling money.
• Outgoing monies (payments).
• Methods of controlling cash.
• Recording cash transactions.
• The cash book.
• Bank transactions and the cash book.
• Bank reconciliation statements.
• The cash cycle – cash flow and liquidity.
• Account receivable turnover ratio.
• Operating cash flow ratio.
• Inventory turnover ratio.
• Professional journals.

Cash Control: Budgeting

• Introduction.
• Budget types.
• The cash budget.
• Factoring in safety margins.
• Variable costs.
• Budget reviews.
• Taxes and budgets.
• GST or VAT taxes.
• Tax input credits.
• Taxable supplies.

Course Aims

• Outline the uses of financial information; accounting standards and conventions; the basic functions of bookkeeping for service businesses.
• Describe the use of balance sheets and their function.
• Outline setting procedures for a bookkeeping system; steps in its use; the flow of information and use of other business documents.
• Formulate procedures for the setting up of a double entry bookkeeping system.
• Outline the functions and specific uses of ‘special journals’.
• Outline methods used to set up credit sales journal and credit purchases journals.
• Outline the setting up procedures for a general journal and its use.
• Describe methods used to close ledger accounts at the end of an accounting period.
• Describe profit and loss statement preparation methods.
• Outline the use of appropriate methods for the depreciation of non-current assets.
• Outline the fundamentals of cash and accrual accounting; the ‘matching process’; the necessity for balance day adjustments.
• Describe the cash cycle; the importance of cash control and its various methods (including petty cash systems and bank reconciliation processes).
• Outline the role of budgets and their importance to business.

What You May Do In This Course

Here are just some of the things you will be doing:

• Describe the activities of service businesses.
• What is the difference between an accounting convention and a doctrine?
• How is the accounting period convention important to making business decisions?
• Why might the accounting entity convention be important in business?
• What is the Doctrine of ‘Materiality’?
• Define the term ‘Balance Sheet Equation’. Describe what a balance sheet is made up of. Know where items appear on the balance sheet. Describe 3 balance sheet formats.
• Describe the meaning and importance of separating current assets from fixed current assets and current liabilities from long-term/deferred liabilities on the balance sheet.
• Prepare a balance sheet.
• Show the equations used for determining a business’s working capital.
• Explain what the difference between a ledger and a journal.
• Describe source documents.
• Describe a chart of accounts and its use; draw up a chart of accounts.
• List the journals used in an accounting system.
• Describe a Statement of Account and outline its use.
• Define double entry accounting.
• Describe a ledger account and the difference between balancing a ledger account and footing a ledger account.
• Define a trial balance; prepare a trial balance.
• Compare three-column ledger accounts with T form ledger accounts; enter transactions into a ledger account; balance a ledger account.
• Describe the use of a drawing account, and how drawings are classified in the balance sheet.
• Describe the functions of an analysis chart include an example using transactions to show A, L and OE.
• Prepare a T form Balance Sheet.
• Describe a Cash Receipts and Cash Payments journal their uses and their source documents.
• Differentiate between a general ledger and a special journal.
• Outline the benefits of a multi-column cash journal and a simple format cash journal.
• Design a cash payments journal and a cash receipts journal. Describe the functions of posting references and sundry columns. Post items to a cash receipts and cash payments journal.
• Explain the difference between a ‘discount allowed’ and a ‘discount received’.
• Describe the difference between a credit sale and a credit purchase and state the source documents. Prepare a credit fees/sales and a credit purchases journal and do a range of appropriate postings.
• Describe the role and usefulness of a Subsidiary Ledger.
• Outline the role and usefulness of a ‘Debtors Control’ account.
• Show the double entry of goods bought on credit.
• Describe a Control Account.
• Describe the aim of a general journal and its key sections. Change a general journal to accommodate subsidiary ledger. Correct errors in a general ledger account.
• Explain the term bad debt. Use the general journal to record a bad debt.
• Understand debt settlement offers in relation to a bad debt. Write off bad debts.
• Prepare a general journal. Record entries to a general journal. Know how the general journal is used in preparing closing entries. Set up a general journal. Close off a general journal.
• Explain the term and use of ‘Contra Entries’.
• Record non-current assets in a purchases journal.
• Know the difference between closing and balancing a general ledger account.
• Identify which ledgers are closed off at the end of the accounting period.
• Describe a profit and loss account and how to work out a net profit or a net loss.
• Know which account does the net profit or loss is transferred to.
• Describe a profit and loss statement and how it relates to the balance sheet.
• Know why functional classification and segmentation used on profit and loss reports.
• Describe extraordinary expenses and how they are listed on the profit and loss statement and why.
• Describe ‘Materials on Hand’ calculate materials on hand. State how they are reported on the profit and loss statement. Prepare a profit and loss statement.
• Describe the difference between cash accounting and accrual accounting.
• Describe Balance Day Adjustments and their importance to bookkeeping.
• Describe pre-paid expenses and outline the difference between the asset and expense approaches to the recording of prepaid expenses.
• Describe the importance of reversing entries and when they are done.
• Know a range of common balance day adjustments.
• Prepare a Trail Balance for a business that carries stock and has balance day adjustments. Create general journal for adjusting entries; Post the entries to the relevant general ledger accounts. Close off the accounts to profit and loss. Prepare a new trial balance; Prepare the profit and loss statement; Prepare the balance sheet.
• Enter reversing entries for the new accounting period.
• Outline the usefulness of a 10-column worksheet.
• Make entries into a cash book and present a reconciliation statement.
• Draw up and use a petty cash book.
• Describe bank reconciliation statements and their use.
• Describe methods of cash control; describe liquidity and its link to cash flow.
• Describe accounts receivable turnover ratio; operating cash flows ratio; inventory turnover ratio.
• Outline the importance of budgets to a business; describe a range of budgets.
• Describe the term ‘safety margin’.
• Describe the term ‘cash budget’ and outline how debtors and creditors are included.
• Describe a range of variances in a budget.
• Describe the importance of budget reviews.

Why Do We Need Bookkeeping?

There are many reasons for keeping accurate records of financial transactions, including:

• Legal requirements – laws vary from one jurisdiction to another; however most governments will have laws in place that require accurate financial records to be kept. These are commonly needed for taxation, but also for various other reasons. Europe and the UK have stringent legislation regarding health and safety.
• To monitor and control the financial position of a business (e.g. regulate cash flow, maintain liquidity) and to understand what your financial position is at any given time.
• Accurate records allow you to fulfil your legal and tax obligations and also benefits you if you are seeking finance or want to sell the business.
• You can see how your business is performing at certain times of the year and if this is a normal seasonal occurrence for your industry or not.
• Makes audits easy and swift.

Using Bookkeeping as a Management Tool

When a manager has access to well-kept books they can use these as a tool for future business planning and in order to make timely and considered decisions. They can see at a glance whether the business is making a profit or a loss, how much money is owed to creditors and how much is owed to the company by debtors. The can determine by using this information whether all is going to plan and decisions can then be made around that information. For example if sales are down should prices be dropped? Can the wage bill be met? Is downsizing an option to consider? Conversely, if sales are up decisions to expand the business may need consideration. How much would it cost to expand? How much extra money would it take to cover expansion costs? And so on.

Managers are also able to see in detail where spending has increased or decreased. For example if the phone account is suddenly a lot higher than it has been in the past, employees may be using mobile phones more for business, or it may be for personal calls – these sorts of added, unexpected expenses, lower the net profit (or bottom line as it is referred to). A manager can look at these lifts in expenditure and adjust spending or reign in employees accordingly.

Cash flow is important in the secure trading of any business and efficient bookkeeping clearly shows the manager which creditors are slow in paying, and whether action needs to be taken.

Not all bookkeepers are the same

Some are broadly trained and experienced and can perform all the “standard” tasks of a bookkeeper, in a whole range of different types of organisations. Others specialise by becoming highly skilled and knowledgeable in one area of the profession.

A bookkeeper maintains the full set of accounts and prepares the profit and loss statements and balance sheets, however other tasks a bookkeeper may focus on include:

• General bookkeeping (keeping books to trail balance only).
• Single entry bookkeeping.
• Double entry bookkeeping.
• Payroll.
• Accounts receivable and payable.
• Receptionist bookkeeper.
• Auditing clerk.
• Bookkeeping software (MYOB, Attache, Quiken. Quickbooks etc.).
• Trustee clerk (e.g. at a real estate agent’s office).

A Statement of Attainment in Bookkeeping Foundations can benefit a variety of individuals and professionals who are looking to build a strong understanding of the fundamental principles of bookkeeping and financial record-keeping. Here are some specific groups of people who can benefit from this credential:

• Small Business Owners: Entrepreneurs and small business owners can use the foundational knowledge gained from a bookkeeping program to manage their business finances more effectively, maintain accurate records, and make informed financial decisions.
• Aspiring Bookkeepers: Individuals who are interested in pursuing a career in bookkeeping or accounting can benefit from this program as it provides them with the foundational skills and knowledge needed to enter the field.
• Administrative Professionals: Office managers, administrative assistants, and support staff can improve their ability to handle financial responsibilities within their organizations, such as budgeting, expense tracking, and financial reporting.
• Students and Recent Graduates: Students studying business, finance, or accounting can use a Statement of Attainment in Bookkeeping Foundations to supplement their academic knowledge and gain practical skills that are valuable in their future careers.
• Non-profit Organizations: Employees and volunteers working for non-profit organizations may find value in bookkeeping training to maintain accurate financial records and ensure compliance with accounting standards.
• Career Changers: Individuals from diverse backgrounds or industries who are looking to transition into finance-related roles can use this credential to gain foundational knowledge and demonstrate their commitment to prospective employers.
• Personal Financial Management: Anyone interested in managing their personal finances more effectively can benefit from bookkeeping foundations to create budgets, track expenses, and make informed financial decisions.
• Continuing Education: Experienced professionals in various fields can pursue a Statement of Attainment in Bookkeeping Foundations to update their skills, stay current with financial best practices, and fulfil continuing education requirements.
• Human Resources Professionals: HR professionals looking to enhance their understanding of financial aspects related to compensation, benefits, and payroll can use this program to build foundational knowledge.

In summary, a Statement of Attainment in Bookkeeping Foundations is a valuable credential that can benefit a wide range of individuals and professionals, whether they are looking to enter the finance field, manage business or personal finances, or enhance their existing skills for career advancement. It provides a strong foundation in bookkeeping principles that are essential for sound financial management.